Cases - Pilon Ltd v Breyer Group Plc

Record details

Name

Pilon Ltd v Breyer Group Plc

Date

[2010]

Citation

EWHC 837 (TC)

Legislation

• Arbitration Act 1996
• Civil Procedure Rules 1998

Keywords

Adjudication - responding party’s defence will be within the scope of the dispute - did not take into account overpayment defence - decision unenforceable

Summary

The responding party’s defence will ordinarily be implicitly within the scope of the dispute referred, even if the referring party had, through clever drafting, sought to exclude it.

In this case and on the assertions of Pilon the adjudicator had erroneously decided not to take account of Breyer’s overpayment defence. The court held that the adjudicator’s decision was unenforceable as a result. The judge summarised the law as follows:

'22.1 . The adjudicator must attempt to answer the question referred to him. The question may consist of a number of separate sub-issues. If the adjudicator has endeavoured generally to address those issues in order to answer the question then, whether right or wrong, his decision is enforceable: see Carillion v Devonport.

22.2 . If the adjudicator fails to address the question referred to him because he has taken an erroneously restrictive view of his jurisdiction (and has, for example, failed even to consider the defence to the claim or some fundamental element of it), then that may make his decision unenforceable, either on grounds of jurisdiction or natural justice: see Ballast, Broadwell, and Thermal Energy.

22.3 . However, for that result to obtain, the adjudicator's failure must be deliberate. If there has simply been an inadvertent failure to consider one of a number of issues embraced by the single dispute that the adjudicator has to decide, then such a failure will not ordinarily render the decision unenforceable: see Bouygues and Amec v TWUL.

22.4 . It goes without saying that any such failure must also be material: see Cantillon v Urvasco and CJP Builders Limited v William Verry Limited [2008] EWHC 2025 (TCC). In other words, the error must be shown to have had a potentially significant effect on the overall result of the adjudication: see Kier Regional Ltd v City and General (Holborn) Ltd [2006] EWHC 848 (TCC).

22.5 . A factor which may be relevant to the court's consideration of this topic in any given case is whether or not the claiming party has brought about the adjudicator's error by a misguided attempt to seek a tactical advantage. That was plainly a factor which, in my view rightly, Judge Davies took into account in Quartzelec when finding against the claiming party.'

Although the judge in this case decided that the adjudicator’s decision was not severable he did indicate that there may be occasions on which it would be appropriate to uphold some parts of a decision whilst refusing to enforce others.

Breyer sought to resist enforcement by way of a separate application under Part 8 of the Civil Procedure Rules to the effect that it had over-paid a considerable sum of money on other parts of the account but which the adjudicator had failed to take into account. The judge however found the issue raised by Breyer to be too complex to be dealt with by way of the Part 8 procedure - a procedure devised to resolve disputes where there are no substantial factual issues in dispute.